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His comments came as new research showed Australia could significantly reduce the number of international carbon permits companies need to buy and in­crease emissions allowed under a trading scheme by reducing logging of native forests.

According to Andrew Macintosh, associate director of the Australian National University Centre for Climate Law and Policy, if forest harvesting remains at 2010 levels, Australia will be credited for 12 million tonnes a year of reductions until 2020.

The $276 million Tasmanian forest deal signed at the weekend could potentially raise credits to bet­ween 15 and 20 million tonnes of emissions a year and if all native forest logging was stopped, the credits would rise to 38 million tonnes a year, nearly half of the abatement needed to meet Australia’s 5 per cent emissions reduction target for 2020.

The new credits depend on the adoption of international ­accounting rules for land use, including reference levels from which emission reductions can be measured.

Mr Macintosh said while the Australian approach was one of the best proposed in international negotiations, it assumed no more declines in native logging over the next 10 years.

Giving evidence before a ­Senate committee, Department of Climate Change secretary
Blair Comley
said the removal of fuel and synthetic greenhouse gases from the scheme had further reduced the number of companies covered.

“If you exclude a sector from a carbon pricing regime, then either abatement has to occur elsewhere in Australia or permits need to be imported," Mr Comley said. “If you are removing low-cost abatement from the scheme, you have to shift abatement to other places, which could be higher cost."

He later sent a clarification to the committee, insisting the government’s latest figure of “around 500" companies was still accurate.

“I suggested that there could be under 500 and suggested the number could be between 400 and 450," he said.

“This was a misstatement based on some earlier briefing I had received."

Senior Treasury officials faced hostile questions over their modelling of the ­carbon scheme.

Questioned about the finding there would be a world carbon price by 2016, Treasury modeller Meghan Quinn said it was assumed only that countries would take action consistent with pledges to cut emissions.